GGS Letter to City Council Seeking Answers re. Great Wolf Application

Honorable Mayor, City Council Members and City Manager:

Gilroy Growing Smarter is not taking a formal position on Great Wolf Lodge at this time.  However, we do have concerns that we want you to publicly address (either through the city website or social/news media) before a decision is made to enter negotiations with Great Wolf.  

We understand that 100% agreement is never a reality. Our goal is to create the best win-win situation possible for our citizens and our City.  Many of the following concerns have come from our members and citizens commenting on Next Door.  

  1. 5 Year Revenue Study and written contingency agreement--Ask Great Wolf to provide a 5 year analysis showing all categories of revenue paid to each city on all of their properties. (i.e. lease, sales tax, occupancy tax and any other tax) Is there a written contingency agreement if this lodge does not meet stated revenue projections and decides to leave Gilroy or decides to sell to another operator?  Will the contractual obligations be transferred to the new owner? As part of the negotiated contract, Great Wolf should be required to maintain their property in excellent condition.  According to various customer reviews on different websites, some of the properties are not well maintained or managed. Will Gilroy require that Great Wolf not open any competing locations in northern California?  How will Great Wolf compete with Disney’s Grand Californian?
  2. Architectural rendering/Size of Lodge-- If their Garden Grove facility has 603 rooms and is a nine story building, how is it possible that a 700 room facility would not be seen from Hwy. 152?  We would like to see a rendering of the proposed property to see how it blends with the environment and NOT be visible from Hwy. 152, Burchell Road or Eagle Ridge.  Since Great Wolf is going to be a neighbor of Gilroy Gardens, they need to follow the same landscape theme to blend in.  The cement and plastic used in existing Great Wolf facilities are inappropriate for this rural setting. 

    If they want to be a part of our scenic corridor, they need to blend in aesthetically using high quality materials, design and craftsmanship. Other beautiful areas like Carmel and Mill Valley have strict sign ordinances requiring that signs not be too large or lighted from within. If they are unable to do this Great Wolf should consider another location in Gilroy. 
  3. Revenue Projections for Gilroy—We want to be assured that the revenue projections that Great Wolf has provided are as accurate as possible.  Have they done a marketing study? To make $8 million in tax revenue a year, how many rooms per month would have to be filled?  Overly rosy projections and badly negotiated concessions could be a financial disaster for Gilroy.
  4. Break-even analysis—What incentives would Gilroy provide and how much is that going to cost the city? How will the city pay for these incentives given to Great Wolf? Are there provisions for a long-term lease at market value?  Are there any provisions if the lease is broken?  How long does it typically take for a Great Wolf Lodge to get to full capacity and produce the maximum tax revenues for our city? We would like to see a break-even analysis/return on investment to know how long it will take Gilroy to recover the City’s investment.
  5. Water, Sewage and Traffic Analysis---How much water will Great Wolf need to run the hotel and water park?  What are the impacts to our water supply and sewage treatment plant?  In case of a drought, Great Wolf should follow the same water restrictions as the citizens.  We would like to see a traffic study for Hwy. 152 and Burchell Road.  If there is an impact, Great Wolf should be required to pay. 
  6. Citizen use—Will Great Wolf commit to opening the park to Gilroy residents in conjunction with charitable fundraising as they do in other cities? Could Gilroy residents have the same free or reduced price access as they have at Gilroy Gardens?  Will the City get a list of amenities that will be open on a regular basis?  Will the City require that these amenities not compete with similar amusements that are part of Gilroy Gardens? We want Great Wolf to complement Gilroy Gardens, not compete with our own park.
  7. Downtown BudgetSince Great Wolf is going to be giving the city $5-8 million in tax dollars, we would like a minimum of $100,000 the first year to carry out the requirements of our Downtown Specific Plan. (i.e.  façade grants, marketing to entice new businesses, enforcement of 5D etc…) As the downtown is revitalized, this number can be re-negotiated as sales tax revenue increases for the city.  This should be a performance-based contract.

We understand that time is of the essence.  However, for citizens to feel that this is a prudent investment these points need to be publicly addressed before any decision is made to proceed with Great Wolf.  The citizens deserve and demand holding developers to a higher standard. We are tired of mediocre projects that we have seen so far in Gilroy. It is time for the City of Gilroy to actively raise the quality bar and to stop merely accepting any development that comes through the door.

Gilroy Growing Smarter Core Group, Sept. 24, 2017